As the US dollar stablecoin gradually attracts market attention, companies inside and outside the crypto world have begun to see US stocks as the next target.

At the end of May, the American cryptocurrency exchange Kraken announced that it would offer tokenized popular US stocks to non-American customers; on June 18, Coinbase’s Chief Legal Officer Paul Grewal revealed that the company is seeking SEC approval for its launch of “tokenized stock” services.

The tokenization of US stocks is gradually becoming a visible business.

Today, this business may welcome a new player — the well-known American internet brokerage, the “retail investors’ righteous army”, a key force in the movement to take down Wall Street — Robinhood.

Previously, two insiders from Robinhood informed Bloomberg.revealThey are developing a blockchain-based platform that allows retail investors in Europe to trade US stocks.

According to informed sources, the technical selection for this platform may be Arbitrum or Solana, and the specific partner choice is still in progress, with the protocol not yet finalized.

This news can at least be interpreted in two ways.

First, Robinhood integrates Arbitrum L2 directly into this new platform that allows European users to trade US stocks, serving as the underlying layer for its blockchain trading.

Second, a more likely scenario is that Robinhood plans to utilize the Arbitrum Chains feature of Arbitrum to develop its own dedicated L2 chain based on Arbitrum’s technology stack (Rollup protocol, EVM compatibility, etc.).

Regardless of the final outcome, market sentiment has been stirred.

This also means that Robinhood may develop its own dedicated L2 for the tokenization of U.S. stocks, which would be more beneficial for on-chain settlement and specialized operations for this business.

At the EthCC in Cannes, France, which will be held on the 30th, Robinhood will also make an important announcement at 5:00 PM local time (11:00 PM Beijing time), leading to speculation that it is related to its L2 and US stock tokenization business.

At the same time, A.J. Warner, the Chief Strategy Officer of Offchain Labs, the company behind Arbitrum, will also attend the conference, which gives everyone more room for simultaneous announcements.

Recently, the price of ARB has been a bit sluggish, but its 24-hour increase once surpassed 20%, ranking among the top in the cryptocurrency increase list.

More suggestively, Roobinhood’s X account for the European region replied “Stay tuned” under the discussion thread of the meeting agenda by netizens. Combined with Bloomberg’s report on providing U.S. stock trading in the European region, the possibility of officially announcing this feature has become higher.

Everything has traces to follow.

The idea of Robinhood’s tokenization of US stocks is not a sudden inspiration.

In January of this year, the company’s CEO Vlad Tenev onceCriticismAccording to current U.S. regulations, there is no clear framework and rules for the registration of security-type tokens, which hinders the promotion of tokenization products.

And in March.a podcastIn this context, Tenev stated directly: “Now, if you are overseas, it is very difficult to invest in a U.S. company.”

This also touches on the pain points of most investors who pay attention to the trends of US stocks but are not physically in the US; they urgently need a smoother way to trade US stocks.

At the same time, Tenev also stated that he was considering the tokenization of securities, noting that this would be part of a broader push to integrate digital assets into the financial system.

Now looking at the signs of paving, there are traces to follow.

Currently, Robinhood’s customers in the EU can only trade cryptocurrencies, while the company obtained a brokerage license in Lithuania last month, allowing it to offer investment services such as stock trading in the EU.

In addition, Robinhood signed an agreement to acquire the cryptocurrency exchange Bitstamp last June, and after the transaction is completed, Robinhood will be able to use Bitstamp’s MiFID.Multilateral Trading FacilityThe MiFID license provides derivatives related to cryptocurrencies.

The license has been obtained, regulations have been complied with, and now on the implementation level, we should consider which chain to choose.

Why might it be Arbitrum?

From a technical perspective, Arbitrum is an L2 solution that is fully EVM compatible, which means that Robinhood can seamlessly migrate its existing Ethereum smart contracts and development tools without significantly altering its tech stack.

The compatibility of EVM can be said to be the key for large fintech companies like Robinhood to quickly go on-chain. If one can leverage Ethereum’s vast developer community and existing infrastructure, who would set it aside?

Looking further, Arbitrum’s Optimistic Rollup technology achieves a balance between transaction confirmation time and cost; in contrast, ZK Rollup has higher cost overhead and relatively slower transaction confirmation times. As a platform that needs to handle a large volume of user transactions, Robinhood is more likely to prioritize Arbitrum’s mature technology and lower development threshold.

On the other hand, from a business perspective, this choice also avoids Coinbase.

Base is an L2 launched by Coinbase, and while it uses the OP technology stack, it is unlikely that Robinhood will directly run U.S. stock tokenization business on Base due to its competition with Coinbase in its main business.

Arbitrum offers the option of custom L2 chains (Arbitrum Chains), which allows Robinhood to differentiate itself from Base.

One piece of information you might overlook is that Robinhood and Arbitrum actually have collaboration experience.

As early as ETHDenver in 2024, Robinhood officially announced its collaboration with Arbitrum to simplify the process for users to access Arbitrum through Robinhood Wallet.

This indicates that both parties already have a foundation for technological integration and strategic alliances. Robinhood may choose to continue this collaboration, leveraging Arbitrum’s existing technical support and brand effect to further expand its business.

Imitate Base, different from Base

Although the news that Robinhood is building its own L2 on Arbitrum has not been officially confirmed, it has already sparked widespread discussion in the crypto community.

The sharpest criticism is that this approach is a simple imitation of Base.

Base, launched by Coinbase, adopts an open strategy that invites external developers to build DApps, thereby expanding the ecosystem and attracting users and assets. The success of Base is partly attributed to this open ecosystem (for example, projects like Aerodrome and Uniswap have migrated or built on it).

If Robinhood also builds an L2 based on Arbitrum, open to external developers to expand the ecosystem and run more use cases of real assets on-chain, even though the tech stack is different, this is already highly similar to Base’s business strategy.

The key to creating this impression of “imitation” in terms of perception is latency.

Don’t forget that Coinbase launched Base at the end of 2023, while Robinhood only announced its Arbitrum L2 plans now. This time gap makes Robinhood’s actions seem like a “follow-up” response to Base’s success rather than an original strategy.

In the traditional business sector, fintech companies tend to replicate proven models, which is indeed a safer strategy; however, imitating Base means that Robinhood will compete directly with Coinbase, which has established a first-mover advantage through Base. If Robinhood wants to overtake, it will need to invest more resources and effort.

The well-known data platform Token Terminal has also pointed out a “clear path” for Roobinhood, which is to amplify its advantages as an internet brokerage and take a “closed ecosystem” route that is opposite to that of Base:

Do not invite external application developers to join its L2, migrate all existing financial products (such as trading or investment tools), assets, and users of Robinhood to the blockchain, allowing users to operate directly on the blockchain instead of relying on traditional centralized systems.

This idea is more Crypto Native, combining Robinhood’s existing customer base with pure on-chain play, but a more aggressive approach also means greater resistance, and Robinhood may not necessarily follow this path.

However, if we step out of Robinhood to observe the entire Ethereum ecosystem, there are also voices that believe this will exacerbate the division of Ethereum L2.

Ethereum L1 has lost a lot of initiative in the current ecological situation where L2s are numerous. Whether the performance is good or not is secondary; more importantly, it faces complete marginalization and pipelining. It is easy to create a dedicated L2, but difficult to revive the glory of Ethereum.

Ultimately, how Robinhood will choose is something we might find out after today’s ETHcc.

Statement:

1. This article is reprinted from [TechFlow] The copyright belongs to the original author [TechFlow] If you have any objections to the reproduction, please contact Gate Learn TeamThe team will process it as soon as possible according to the relevant procedures.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Other language versions of the article are translated by the Gate Learn team, unless otherwise mentioned.GateUnder such circumstances, it is prohibited to copy, disseminate, or plagiarize translated articles.